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Federal bureaucracy struggles with waste, spending 'OPM'

A short story reported by the Associated Press this week has to have people shaking their heads at how the federal government manages its real estate.

The story is only the latest report about taxpayer money being wasted to maintain thousands of empty government-owned buildings or in paying more in rent than a building is worth. It’s another case of what happens when government spends OPM — other people’s money.

According to the AP, in the Scranton suburb of Chincilla, the U.S. Postal Service has paid about $200,000 in rent over six years for a building it has yet to occupy. The article explains the Postal Service has been planning to move out of a trailer and into a 1,500 square foot facility, but drainage and access issues have delayed the move — for six years. Most people understand that things can happen with a new building, but most people would not understand paying $31,000 in rent for six years — and still not occupying the new building.

Would a private business do this? Would a family spend money like this? When it’s OPM, in this case taxpayers’ money, it’s apparently not difficult.

Earlier this year, a Pittsburgh newspaper reported that the federal government had paid $45 million over several years to rent a building that could have been bought for half that amount. The General Services Administration agreed to the long-term lease some ten years after a critical report by the General Accounting Office pointed out the problems with such leases.

According to GSA reports, the federal government leases about 1 million square feet, or 45 percent, of the 2.4 million square feet of office space it uses in Western Pennsylvania. Defenders of leases say they work well, keeping the property on the local tax rolls and giving the government more flexibility to move.

But these examples raise questions about the government’s cost-effectiveness in managing office space and buildings. In a 2011 White House report, it was estimated that the federal government owns 14,000 buildings or lots that it doesn’t use. Another report estimated there are 77,000 buildings owned by the federal government that are either empty or underutilized.

The truth is, nobody knows how many government-owned buildings are sitting around empty. But if most of those buildings were sold, it’s been estimated about $15 billion would be saved over three years because of reduced rent expenses, utilities and general upkeep.

Another example of the government’s problem with unused buildings was featured in a story by National Public Radio in March. In that case, a government-owned three-story brick building had been boarded up for almost 30 years. It turns out the building is owned by the federal government and is located six blocks from the White House. Given the hot real estate market in Washington, D.C., the vacant building, or the land it sits on, is worth millions of dollars. Yet it’s been sitting empty, and deteriorating for 30 years. Just one of tens of thousands of similar buildings.

Efficient management of something the size of the vast federal bureaucracy is clearly difficult. The empty building stories are one bit of evidence of the problem. Another surfaced this week with a report that the federal government made an estimated $100 billion in payments last year to people who are not entitled to them. These include tax credits to people who do not qualify, unemployment or disability benefits paid to people who do not qualify, as well as payments for medical services that were not necessary or to people who did not qualify for the benefit.

The problem is found in some large corporations, but it’s more apparent in the federal government. It’s the combination of managing a complex bureaucracy while also spending other people’s money — which reduces the motivation to sell empty buildings, get out of bad leases, and stop payments to people who do not deserve them.

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